Boeing Set to Cruise Higher After Earnings Beat

Boeing earnings came in better than most expected

Managing Editor
Oct 24, 2018 at 9:07 AM
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The shares of Boeing Co (NYSE:BA) are up 4.2% ahead of the bell, after the Dow name posted an impressive third-quarter earnings beat. The aerospace and industrial giant reported adjusted quarterly profit of $3.58 per share, exceeding the average analyst estimate of $3.47. Boeing also upped its fiscal-year revenue and profit forecasts. 

Boeing stock flew to a record high of $394.28 back on Oct. 3, but since then has struggled, finishing higher only twice in the last 14 days. However, the shares appear to have found support at their 160-day moving average, which contained pullbacks in August and September, and has served as a technical springboard in the past. Overall, BA has gained nearly 19% in 2018. 

Analysts have yet to come forward with bull notes in the wake of the upbeat report, probably because most are already bullish. Of the 16 brokerages covering BA, 13 rate it a "strong buy," with zero "sells" on the books. Further, its average 12-month price target of $413.52 is a 18% premium to last night's closing perch of $350.05.

Options data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows puts have been increasing in popularity recently. This is shown in its 10-day put/call volume ratio of 0.96, which ranks in the 89th percentile of its annual range. While this ratio indicates calls still have outnumbered puts on an absolute basis, the high percentile suggests the appetite for bearish bets has been much healthier than usual.

The good news for options traders is that the security's Schaeffer's Volatility Scorecard (SVS) is 79 out of 100. This lofty ranking shows BA has tendency to make larger-than-expected moves on the charts compared to what the options market has priced in over the past year.

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